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New research by BETTER FINANCE on the Correlation between Costs and Performance of EU Retail Equity Funds without a doubt establishes a negative correlation between returns and fees
June 20, 2019--Common knowledge has it that if you want to beat the market, you need to turn to highly active management...at a price.
As part of its #FundResearch series, BETTER FINANCE decided to put this notion to the test and take a closer look at the main factors impacting fund performance and the ability to deliver above-market returns, with a special focus on costs.
BETTER FINANCE measured the performance over the last ten years of EU equity retail funds from Belgium, France and Luxembourg in comparison with their benchmarks and found that only 27% of surviving funds with a sufficiently long track record managed to overperform the market over 5-year rolling quarterly periods. This confirms that few active fund managers are able to offset the impact of the fees they charge and that it is mostly up to luck whether an investment will beat the market.
view the EU Retail Equity Funds Correlation between Costs and Performance
Source: betterfinance.eu
Vanguard launches aggregate bond ETF in Europe
June 20, 2019--Vanguard has launched a new fixed income ETF in Europe which provides broad and diversified exposure to investment grade bonds across multiple sectors and segments from both developed and emerging market issuers.
The fund, the Vanguard Global Aggregate Bond UCITS ETF, is linked to the Bloomberg Barclays Global Aggregate Float-Adjusted and Scaled Index which covers a universe of over 23,500 investment grade bonds issued by governments, corporates, and agencies.
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Source: etfstrategy.com
Unscheduled adjustment in SDAX
June 19, 2019--Hapag-Lloyd AG to be deleted from the index, DMG MORI AG to be added
On Wednesday, Deutsche Börse announced an unscheduled change to SDAX. The free float of Hapag-Lloyd AG has decreased from 10.59 per cent to 8.72 per cent.
According to the Guide to the Equity Indices of Deutsche Börse AG, section 5.1.2. Breach of the Basis Criteria (minimum free float of 10 per cent), Hapag-Lloyd AG shares will be deleted from the SDAX index as of 24 June 2019.
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Source: Deutsche Börse Group
Deutsche Bank seeks to shed risky assets as part of overhaul: sources
June 19, 2019--Deutsche Bank is aiming to cut up to a quarter of its riskiest assets in the next few years, people familiar with the matter said, shedding more light on how the German lender is trying to overhaul its business and revive profitability.
The plan provides more detail on a restructuring expected since Chief Executive Officer Christian Sewing promised shareholders "tough cutbacks" to turn the bank around after it botched an attempted merger with rival Commerzbank.
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Source: Reuters
Forecasts for the UK economy: June 2019
June 19, 2019--Forecasts for the UK economy is a monthly comparison of independent forecasts.
Please note that this is a summary of published material reflecting the views of the forecasting organisations themselves and does not in any way provide new information on the Treasury's own views.
It contains only a selection of forecasters, which is subject to review.
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Source: gov.uk
Invesco expands ETF range with three ESG products
June 19, 2019--'Passive holdings still making an active difference'
The new ETFs will track indices where stock weightings are determined by each company's ESG score, rather than size alone.
The Invesco MSCI ESG Universal Screened UCITS ETFs will track customised versions of the MSCI ESG Universal indices, with a choice of geographical exposures to the USA, Europe and the wider globe.
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Source: investmentweek.co.uk
Vanguard trades blows in fund fee war with M&G.
June 19, 2019-Cut-throat competition escalates in UK investment market.
The fee for the Vanguard Global Balanced fund, which holds a mix of equities and bonds, has also been cut from 60bp to 48bp.
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Source: FT.com
Deutsche Bank reportedly plans revamp with 50EURO B "bad bank"
June 17, 2019--Deutsche Bank plans to place some €50 billion in assets, comprised mostly of long-dated derivatives, into a "bad bank" and slash its non-EU equity and rates trading, sources say.
Germany's biggest lender wins cautious support for plan to shift €50bn of unwanted assets into a 'bad bank'
Uncertainty over output gap and structural-balance estimates remains elevated view more Making the Euro Area More Resilient Before the Next Recession Hits view more If you are looking for a particuliar article and can not find it, please feel free to contact us
Source: FT.com
June 17, 2019--The EU fiscal framework strongly relies on the structural budget balance indicator, which aims to measure the 'underlying' position of the budget. But this indicator is not observed, only estimations can be made. This post shows that estimates of the European Commission, the IMF, the OECD and national governments widely differ from each other and all estimates are subject to very large annual revisions.
The EU should get rid of the fiscal rules that rely on structural balance estimates and use this opportunity to fundamentally reform its fiscal framework.
The European fiscal framework involves a complex set of rules and indicators. An important indicator is the so-called structural balance of the general government, which aims to measure the underlying position of the budget balance. Its estimation tries to exclude the impact of the economic cycle (e.g. tax revenues are smaller than usual in an economic downturn) and one-off measures (like bank recapitalisation costs).
Source: bruegel.org
June 17, 2019--Growth in the euro area rebounded earlier this year, but it remains fragile, while risks have increased. Now is a good time for euro area economies to strengthen their ability to weather any future economic difficulties.
A new IMF staff paper looks at the resilience of euro area countries and finds that they have had more frequent and severe recessions than other advanced economies over the past 20 years.
An even greater cause for concern is that differences between member countries' growth and unemployment rates after euro area-wide downturns have widened. This widening was most stark following the 2008 global financial crisis.
Source: IMF
